Firth Industries Ltd v Polyglas Engineering Pty Ltd

[1975] HCA 25

HIGH COURT OF AUSTRALIA

Stephen J.

FIRTH INDUSTRIES LTD. v. POLYGLAS ENGINEERING PTY. LTD.

(1975) 132 CLR 489

25 July 1975

Injunctions

Injunctions—Patents—Action for infringement—Interlocutory injunction—Substantial issue to be tried as to validity of a patent—Principles governing grant or refusal of interlocutory injunction.

Decision

July 25.
STEPHEN J. delivered the following written judgment:-
By this application for interlocutory relief the plaintiffs seek to restrain the defendants from infringing Australian letters patent for an invention entitled "Improvements in or relating to composting" of which the plaintiff company is patentee. The two individual plaintiffs, Mr. and Mrs. Gedye, are the plaintiff company's licensees in Australia and as such licensees are engaged in the marketing of compost bins which are manufactured for them by contract plastic moulders. Each of the defendants is alleged to have played a part in acts of infringement involved in the manufacture and marketing in Australia of compost bins which are sold in competition with the Gedyes' bins. The function of both brands of compost bins is to assist in the process of natural decomposition of domestic waste products so that such products may be converted conveniently and relatively quickly into garden compost; the present market for these bins is principally among suburban home gardeners. (at p491)

2. On the hearing of this application a considerable body of affidavit evidence was tendered on both sides and I heard argument as to the validity of the letters patent, their alleged infringement and the principles which should govern the grant or refusal of interlocutory relief, with particular reference to the decision of this Court in Beecham Group Ltd. v. Bristol Laboratories Pty. Ltd. (1968) 118 CLR 618 and what was said to be the rather different approach of their Lordships in the very recent case of American Cyanamid Co. v. Ethicon Ltd. (1975) AC 396 . Much of what was said in the Beecham Group Case (1968) 118 CLR 618 relates to principles applicable only where there exists a substantial issue to be tried as to validity of a patent; the Court held that no such issue in fact existed in the case before it and its enunciation of principle was to that extent obiter. However I believe that I should not on this application disregard that careful enunciation of principle by a unanimous Court; nor do I regard what is there said merely as a description of then existing practice on applications for interlocutory relief in cases where substantial issues exist as to validity of a patent but rather as express approval of that practice. The practice may now be otherwise in the United Kingdom following the decision in the American Cyanamid Case (1975) AC 396 but as a single judge of this Court I should, I think, adhere to the practice approved of by this Court in the Beecham Group Case (1968) 118 CLR 618 . (at p491)

3. As already mentioned, the facts in the Beecham Group Case did not raise those special considerations which the Court in that case described as generally arising "in a patent action where there is a substantial issue to be tried as to the validity of the patent" (1968) 118 CLR, at p 623 . I have concluded, for reasons which I shall later state, that the present case is, by way of contrast, one in which the defendants' intended attack upon validity does raise substantial issues for determination at the trial. (at p492)

4. The Court in the Beecham Group Case (1968) 118 CLR 618 dealt in some detail with what should, in these circumstances, be the principles governing the grant or refusal of interlocutory relief; the case made out by the plaintiff must be "a strong one so far as the question of validity is concerned" (1968) 118 CLR, at p 623 , there must be more than mere reliance on the granting of the patent. In particular the Court described the long standing general practice, in those cases where substantial issues of validity arise, as requiring rejection of a plaintiff's application for interlocutory relief unless validity had already been judicially upheld or unless the patent had already stood unchallenged for a long period, generally to be regarded as more than six years. Moreover even an unchallenged patent of long standing would not generally be protected by interlocutory injunction if the defendant "shows by evidence 'some ground' for supposing that he has a chance of successfully disputing the validity of the patent at the trial" (1968) 118 CLR, at p 624 . This the Court qualified only by its reference, again at the same page, to what was said by Sir George Jessel in Dudgeon v. Thomson (1874) 30 LT 244 . The Master of the Rolls there described three classes of cases in which, in such circumstances, an injunction might be granted, cases of long and undisturbed enjoyment of an old patent, cases where validity had been established by the courts of another jurisdiction and cases in which the defendant's conduct enabled the Court to say that as against that defendant there was no reason to doubt validity of the patent. These last two categories clearly have no present application, nor is the patent in suit one which I would regard as of sufficient long standing to be described as an old patent either in the sense in which the Master of the Rolls used it, coupled with the notion of long and undisturbed enjoyment, or as the Full Court described it, with greater particularity, when it said that an old patent is "generally taken to mean more than six years old" (1968) 118 CLR, at p 624 . (at p492)

5. The letters patent in suit, being based upon the plaintiff company's earlier and corresponding New Zealand patent, have a convention priority date of 5th March 1969; the Australian application date was 3rd March 1970 and acceptance occurred on 25th July 1973. The Australian letters patent were sealed on 9th January 1974. Marketing of compost bins under these letters patent first began in August 1971. Marketing of the allegedly infringing bins began on a very small scale towards the end of 1973, only achieving greater quantitites towards the end of 1974; it was not until 1975 that the defendants' bins came on to the market in large quantitites. However the plaintiffs became aware of the marketing of the allegedly infringing bins in December 1974; correspondence ensued but it was not until May 1975 that the plaintiffs' present writ was issued. (at p493)

6. Any passing of time after a patentee becomes aware of acts of infringement cannot, I would suppose, be included in the computation of the age of letters patent when considering whether, for the purposes of the grant of interlocutory relief, they are to be regarded as old and of long standing. If in the present case the very earliest date for calculation of age, that of 5th March 1969, be adopted, the letters patent were still somewhat less than six years old when the fact of infringement first became known to the plaintiffs in December 1974. If it matters, the plaintiffs had by then enjoyed rather less than three and a half years of undisputed working of the patented invention in Australia. In these circumstances I would not regard the patent in suit as answering the description of an old patent such as the Full Court refer to. (at p493)

7. It follows that in my understanding of what is said in the Beecham Group Case (1968) 118 CLR 618 the existence of a substantial issue as to validity is enough to deny interlocutory relief to the plaintiffs unless some quite special circumstances exist which would justify me in departing from that general practice to which the Full Court has referred with evident approval. I discern in the facts of this case no such circumstances as would justify such a departure from this general practice. Accordingly the plaintiffs must fail in their present application. Even had I concluded that this was a case of an old patent in the sense referred to in the Beecham Group Case, the joint judgment in that case suggests that an interlocutory injunction should nevertheless be refused if the defendant's evidence shows grounds for supposing that the defendant has a chance of successfully disputing validity of such an old patent at the trial; were it necessary to decide the point I would in this instance conclude that the substantial issues as to validity which will arise at the trial of this action are such that they also amount to grounds for so supposing. (at p493)

8. It remains only for me to state quite shortly why I think that substantial issues as to validity will arise at the trial. (at p493)

9. The patent specification contains nine claims defining the invention; five relate to a method of composting while the remaining four describe an article, a compost bin or mould, used in the described methods of composting. The method claims are simple ones; claim I claims a method of composting by forming a pile of compost in an open-ended bin tapering to the top, later removing the bin and then covering the pile with an air or water proof cover for airing or curing. Claim 2 differs only by calling for a bin of truncated conical or pyramidal shape. Claim 3 adds to the method the feature that the bin should be placed on forked-up earth to allow worms and other soil organisms to enter the compost. Claim 4 then adds the refinement of a sheet of fine mesh wire netting on top of this forked-up earth so as to exclude rodents from the compost. Claim 8 then makes reference to the drawings accompanying the specification. (at p494)

10. The article claims are no less straightforward; claim 5 describes a bin of hollow, open-ended, truncated conical or pyramidal shape, claim 6 refers to alternative materials from which the bin may be made, claim 7 adds to the bin a detachable lid, top or cover so as to keep out "rain or flies or the like" and claim 9 again makes reference to the accompanying drawings. These four article claims also include references to purpose, the bins are described as "compost" bins, their "construction and arrangement being" that they "may be placed on the ground, filled with compost, and then removed from the resultant pile of compost ready to receive a further pile of compost". (at p494)

11. The defendants attack the validity of each claim but, because of what they regard as strong grounds for denying any infringement of the method claims, they direct their attack on validity especially to the article claims. These claims are in one respect unusual; if read without the references they contain to the particular purpose for which the articles in question are intended the articles described are of a most ordinary and commonplace character. It could, I think, scarcely be said of the article described in the main article claim, claim 5, that if stripped of all words of purpose its shape or construction is in any sense novel or inventive, the same, of course, may be said of the other article claims. Whatever novelty or inventiveness they possess depends then upon the method of use as compost bins and in this sense their validity as claims must also be dependent upon that method of use. The introduction into claim 5 of words of purpose is no doubt intended to enhance its adequacy as an independent claim but viewed in the light in which it is put forward, as a claim to an article and not to a method, it is difficult to appreciate how these words of purpose in fact improve the position; the article described and for which monopoly is claimed remains a most commonplace one and by adding to its description the name "compost bin" or the information that it may be placed on the ground, filled with a substance and later removed does no more than acknowledge that it has mass and is open at both ends. Any novelty or inventiveness appears to reside not in the article claims themselves but in the method claims, which include reference to the articles and, by a combination of the method and of the article used in conjunction with it, may involve a valid claim. What I have said may disclose real difficulties as to validity both from the point of view of width of claim and of novelty and obviousness and the defendants in this respect rely upon the case of Adhesive Dry Mounting Company Ltd. v. Trapp &Co. (1910) 27 RPC 341 , in which two claims were made, a method claim and an article claim. As a matter of construction the latter claim was held not to be confined to the particular article only when used in accordance with the claimed method and was accordingly bad because anticipated by an earlier patent for an article designed for a quite different application but which in its physical description anticipated the article claim which was in suit. Here no earlier patent is relied on but it is said that if, as the defendants contend, the article claims are to be treated independently of method of use the same result ensues because of the entirely commonplace nature of the article described. (at p495)

12. However, even if the article claims, viewed as independent claims to monopoly, are not vitiated by the foregoing, the defendants contest their validity on other grounds, relying on the evidence of a Mr. Bradley. Mr. Bradley, the manager of one of the defendant companies, has deposed to his own use since 1961 of old drums for the making of garden compost; he would fill the drums with waste matter and use the resultant compost to improve his garden soil; he recalls his parents and grandparents doing likewise but with this difference, they grew crops of potatoes in the drums at the same time, so that both potatoes and compost were produced. Then, later, before the end of 1968, he adapted and began to use a discarded tapered fibreglass case, designed to hold a swimming pool filter, for the purpose of making compost in his garden; he cut a large hole in the bottom of this case, thus converting it into an open-ended, hollow, tapering tubular object which he placed upside down on the ground with the cut end uppermost; into it he placed waste material and thus produced compost. The shape of this object was not strictly that of a truncated cone or pyramid since Mr. Bradley only cut a hole in what had been the base of the case, leaving three vestigial legs remaining; had he effected more drastic surgery a truncated cone would have been the result since the sides of the case were tapered. (at p495)

13. This evidence is in itself in my view sufficient to raise a substantial issue as to the validity of this patent. Here is an instance of use of a synthetic plastic bin for the production of garden compost, being a "hollow member having an open top and open bottom, the construction and arrangement being that the mould or bin may be placed on the ground, filled with compost, and then removed from the resultant pile of compost ready to receive a further pile of compost". I quote from claim 5 omitting only the first twelve words of that claim, which read "A compost bin or mould comprising a truncated conical or truncated pyramid". If at the trial this evidence remains as the sole instance of prior use of a compost bin it will no doubt be matter for debate whether the vestigial legs and inward curve of the bin towards its top sufficiently distinguish it from the truncated conical or pyramidal article described in claim 5: cf. Griffin v. Isaacs, per Dixon J. (1942) Official Journal of Patents 739, at p 740 ; I would myself doubt whether this is more than an immaterial difference, it plays no part in the functioning of the bin as a compost bin and had it been present in an allegedly infringing article would not, I should have thought, have afforded a good defence to a claimed infringement: Commonwealth Industrial Gases Ltd. v. M. W.A. Holdings Pty. Ltd. (1970) 44 ALJR 385, at p 388 . (at p496)

14. Mr. Bradley further deposes to the manufacture in 1968 of fibreglass litter bin tops which were open-ended, hollow, truncated cones; he himself in 1971 used certain reject litter bin tops in his garden as compost bins. It was his experience with the filter case and later with these litter bin tops that first caused him to suggest that manufacture of the alleged infringing compost bins should be undertaken. The defendants rely upon the manufacture of these litter bin tops as a further instance of lack of novelty, asserting that it is irrelevant that they were not manufacturered or sold as compost bins so long as they do in fact precisely answer the description of the article in claim 5. They contend that although on this interlocutory application they have, due to lack of time for enquiry, been obliged to rely upon the evidence of witnesses closely associated with their own manufacturing activities, there are in fact very many articles which have long been on the market and which fall directly within claim 5, chimney pots providing one common instance. (at p496)

15. The defendants further attack the article claims on the grounds of obviousness and lack of inventive step; the specification itself refers to the prior art as including the use of bins in composting and the defendants link this to Mr. Bradley's evidence of the common use for many years of large drums for that purpose and contend that all that claim 5 adds to what was already common knowledge is a tapered shape. This shape is said to be something which the evidence shows to be almost mandatory when a new article comes to be manufactured as a compost bin, rather than a discarded article being adapted for that use, both because of the particular methods of manufacture involved in bin shaped articles, at least when made of fibreglass, and because of the well known convenience which the stacking qualities of tapered articles possess when transported. Claim 6, with its reference to various materials, is said to add nothing that is not obvious and the same is said of claim 7, which calls for a detachable lid. (at p497)

16. These contentions do disclose, in my view, ample grounds for concluding that the article claims raise substantial issues as to validity. I do not propose on this interlocutory application to examine questions of validity of the method claims because the evidence does not, I think, establish any case of infringement of these claims. Each of the method claims incorporates reference to the covering of the pile of compost "with a substantially air and/or water proof cover for airing or curing", this is an integral step in the claimed methods. Now the infringement of these method claims which is alleged is not that the defendants themselves employed those methods but that they advised and procured others to do so by selling infringing bins together with instruction folders as to their use. Assuming that this amounts to infringement, a matter open to some doubt - see Innes v. Short (1898) 15 RPC 449 and compare Townsend v. Haworth (1875) 12 Ch D 831 (n). , Adhesive Dry Mounting Co. Ltd. v. Trapp &Co., per Parker J. (1910) 27 RPC, at p 353 and Walker v. Alemite Corporation, per Dixon J. (1933) 49 CLR 643, at p 658 - the evidence does not establish that anyone has in fact on the advice of the defendants undertaken that step, prescribed in the method claims which is involved in covering the pile of compost with a cover for airing or curing. Indeed the defendants' written instructions issued to purchasers of their bins do not prescribe such a course; all that is said in this regard, in the course of quite lengthy instructions for use, is that if the composting material is not needed immediately or is insufficiently cured it should be wrapped in black polythene. It is a curious feature of this case that the plaintiffs' own quite elaborate instruction pamphlet is entirely silent concerning this integral step in the method claims, as are the various affidavits filed on behalf of the plaintiffs and which describe the use of the bin, in accordance with the plaintiffs' pamphlet, as entirely satisfactory. These affidavits strongly suggest that this step plays no useful part in the composting process. Be that as it may, the whole of the evidence as to infringement of the method claims is such that I would on this ground alone, and without regard to questions of their validity, refuse any injunction so far as they are concerned. (at p497)

17. It is, in the circumstances, unnecessary for me to express any conclusions concerning the balance of convenience. Counsel for the defendants informed me that he had been instructed to undertake that should an injunction be refused the defendant Haddock Holdings Pty. Ltd., a company of some substance, would undertake to pay to the plaintiffs whatever damages they or any of them may be held ultimately to be entitled to recover in this action from any of the defendants. Upon that defendant, by its counsel, formally giving that undertaking and upon the defendants generally, by their counsel, also undertaking, pending the determination of this action, to keep an account of all sales of compost bins and of all moneys derived from such sales I will refuse the plaintiffs' application and reserve to the trial judge the question of costs. (at p498)

Orders

Upon the fourthnamed defendant by its counsel undertaking to the Court to pay to the plaintiffs whatever damages they or any of them may be held ultimately to be entitled to recover in this action from any of the defendants, and upon the defendants by their counsel undertaking to the Court pending the determination of this action to keep an account of all sales of compost bins and of all moneys derived from such sales, application by the plaintiffs for an interlocutory injunction refused.

Costs reserved.